Dear Mr Burnham – Please give us stability and growth above all else
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As Andy Burnham takes office as Prime Minister, Nick Williams argues that political stability and a relentless focus on economic growth are essential.
Once upon a time the installation of a new prime minister was a momentous occasion, coming as it did only rarely. The fact that Andy Burnham on Monday became Britain’s seventh PM in ten years doesn’t detract from the fact that the arrival of a new occupant at Number Ten is still a big deal.
I’m not going to comment on Mr Burnham’s politics – we all have our own personal viewpoints, which is how a healthy democracy should work – but it is reasonable to consider what he might do to ensure a prosperous economy and a vibrant commercial property sector.
First and foremost, what we need now is stability, both politically and economically. Running a business and planning an investment strategy are both best done when there is an element of certainty. The revolving prime ministerial door in recent years, coupled with the inevitable policy flip-flops that entails, has given us anything but stability.
Granted, there is little politicians of any party can do about external economic shocks such as that we are now experiencing thanks to the situation in the Middle East, but it is reasonable to expect our leaders to create a robustness in our economy so that the impact of such global upheaval is minimised.
Andy Burnham’s first task is to build a strong team around him. The coming days will see what the reaction to the appointment of John Healey as Chancellor is from the markets, whose support is crucial to any government, given the level of public debt.
There will be considerable attention paid to the new government’s taxation plans. Burnham has tied himself to Labour’s manifesto pledge not to increase income tax, employee national insurance or VAT, but has nevertheless stated that ‘there is some room movement on tax’.
Property taxation is one are many commentators expect to come under the spotlight. Few people of any political persuasion view the current system of council tax (based on 1991 valuations) and stamp duty (which penalises labour mobility) as fit for purpose. But any review must be thorough enough to take into account potential anomalies in any new system and ensure it doesn’t put a further brake on the economy.
The new PM has indicated that support for hospitality, leisure and retail is in his sights, and this would be very welcome; these are the sectors which were hit hardest by Rachel Reeves’ combined national insurance and minimum wage heist two years ago.
Whatever the detail, Burnham’s focus must be laser-focussed on economic growth. Without that there can be no improvement in public services, no alleviating the cost-of-living programme, and no money for any of the other competing priorities with which he will be wrestling this week.
Nick Williams is managing partner of Arnolds Keys.
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